Zurich: how the world capital of housing shortages is tackling the problem 

On April 5, thousands demonstrated in Zurich against the housing crisis. It was the city's largest housing demonstration since the turn of the millennium. Keystone / Ennio Leanza

In Zurich, only seven out of 10,000 apartments are vacant on average – the lowest rate in Switzerland and probably in the Western world. What’s the city doing about its housing crisis?  

Anyone looking for somewhere to live in Zurich has a big problem. People joke that the only place you can rest and catch some sleep is in one of the queues to look at the few vacant apartments.  

These queues are an all-too-frequent sight in Switzerland’s economic powerhouse. A few months ago comedian Lara Stoll made a video that went viral, showing her queueing with about 300 other people to view an apartment.  

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The housing market in Zurich has dried up – at least if you go by the vacancy rate. It is calculated on a chosen day and includes all forms of unoccupied housing. At 0.07% Zurich has the lowest rate in Switzerland. Judging by the comparative data available, it may even be the lowest in the West.  

SWI swissinfo.ch compared the figures for sought-after cities all over the world. The quality of the data and the way they are gathered vary, but no matter which way you look at it, Zurich stands out.  

SWI swissinfo.ch/Kai Reusser

With 450,000 inhabitants, Zurich is Switzerland’s largest city. The problem of housing is a long-standing issue, and the pressure is growing all the time. In early April thousands of people took to the streets to demonstrate against the housing shortage.  

High price of land  

To tackle the problem, the city government set up a new department last year. Philippe Koch is the taskforce manager appointed to deal with the housing shortage in Zurich. He had been a lecturer in municipal politics and urban processes at the Zurich College of Applied Sciences (ZHAW). The media have been calling him “Mister Housing”, a title he’s not keen on.  

We met Koch along with Anna Schindler, head of urban development for Zurich, at the city hall. Schindler has a corner office looking out over the River Limmat and the tall spire of the Fraumünster church. However, her job and that of Koch is not just to look at the city from a height but from below as well – from the viewpoint of all those who can no longer afford to live in Zurich.  

Their mission from the city government is to ensure that by 2050 a third of all rental properties should be non-profit. These should of course be in the low to mid price range. The number of such apartments has stagnated in the city for years, at between 27% and 29% of the total housing stock.  

Buy, buy, buy 

So what’s the city doing? “A lot of buying – more than ever before,” Schindler says. The city has a mandate to do this, and the money for it isn’t lacking either. Since the start of 2025 the city, along with non-profit and other building agencies, can draw on a new tranche of CHF300 million ($370 million) from what is called the housing fund.  

The structural problems won’t be solved just by throwing money at them. “It’s a seller’s market. The city doesn’t have any legal priority as a buyer,” Schindler says. “After a certain point the city just can’t keep bidding, as happened with Uetlihof.”  

The city of Zurich almost purchased the Üetlihof office complex as a strategic reserve, but the CHF1.2 billion price tag proved too much for a majority of the city’s parliament. Keystone / Alexandra Wey

Uetlihof is the former Credit Suisse campus. Since 2012 it has been owned by a major international investor, the Norwegian Government Pension Fund. In 2022 the government of Zurich wanted to buy up this “second-largest contiguous piece of land in the city” for use as a strategic reserve for CHF1.2 billion. However, the motion was narrowly defeated in the city parliament.  

This episode illustrates the main problem the city of Zurich is up against: land prices have gone up, and land is what the city currently lacks. “The city sold off a lot of land in the 1980s, and now it costs a great deal more to buy it back,” Schindler explains.   

Half the price of an apartment is determined by the price of the land under it. Koch therefore sees one of the ways out of the housing crisis as being the uncoupling of the land and housing markets. One instrument available to government is that city-owned land can be made available to non-profit agencies under the terms of a lease to build. Then again, the city of Zurich has only a limited amount of land to dispose of.  

Other instruments whereby private owners can be compelled to build are hard to enforce in Switzerland. One example would be taxing unused or under-used land to put a curb on land speculation. The city of Zurich has been dealing with private owners more with the carrot than the stick approach. Thus it allows a higher occupancy rate (building density), if part of the housing stock is non-profit.  

Density and its consequences 

The main potential for growth in Zurich is in new buildings to replace old. Additions and expansions to existing buildings are often not a paying proposition for investors. Also from the point of view of the cityscape, Schindler say that “thinking of the urban space”, there are arguments against the idea of just adding an extra floor to every building.  

When it comes to new buildings to replace old, they yield on average 87% more housing space owing to increased density, according to a 2023 survey. The problem here is what ensues. With new buildings, rents go up. Part of the tenant group of the old building just have to move out. That happens even in the case of non-profit housing agencies. There is a conflict of aims and an issue of distributive justice – the socially just allocation of resources.  

“We need both: subject and object promotion,” Koch adds. In plain language that means that the social services need to provide enough support to low-income earners as well as the city providing non-profit and subsidised housing units.  

The alternative is continued gentrification. “The bottom third of renters are having to compete for housing units that eat up more than 50% of their household income,” Koch says. The rule of thumb in Switzerland is that housing should not cost more than a third of someone’s income.  

Never-ending price spiral 

The problem of high rents in Zurich is affecting the middle classes as well: 40% said in a 2023 survey that rents were too high compared to their earnings.  

This is especially the case for people looking for a new apartment. What are known as asking rents on the market are 26% higher than existing rents. Only part of this can be explained by the fact that new buildings are included in this range of rental offers, and they cost more, of course.  

A never-ending price spiral is at work. Neither the city of Zurich nor Switzerland as a whole has been able to find mechanisms that might work against this.  

The crisis also has to do with lifestyle and demographics. The average number of individuals in a household has decreased, while the space requirements per capita have increased. About the same number of people are living in Zurich as in the early 1960s – although there has been a net increase of about 90,000 apartments. There is an increased density of building now, but there was a higher density of population then.  

SWI swissinfo.ch/Kai Reusser

Money to be made from legal challenges 

Ultimately, demand drives prices, and so do the incomes made by top earners working for Google or the financial sector in Zurich, including many expats. “It’s a fact that average incomes in the city have risen, and the land prices and rents have gone up with them,” Schindler says.  

To get prices under control, there would have to be a wider range of housing stock on offer. Building activity in Zurich is legally severely restricted, as it is in other population centres in Switzerland. It takes a long time to get building permits, plus there are often legal challenges.   

“About 70% of building projects in Zurich face objections,” Koch says. As a rule these challenges aim to delay the process or, in the case of big projects, to reach an advantageous financial settlement. 

Apartment-hunting as a national sport 

Koch and Schindler do not see a neat solution to the Zurich housing crisis. Dialogue is needed, they say, including dialogue with profit-oriented actors such as the big pension funds, to get a socially responsible kind of development that is politically acceptable.  

Neither rely on the market nor regulate more, but talk to each other – this is the refrain of Swiss politics coming out of the Zurich city hall.  

Koch and Schindler also suggest that the housing crisis is by no means a crisis for all Zurich residents. So there is a distortion not just in the marketplace, but also in public perception.  

Highly sought-after: The urban development Hard tram depot is located directly on the Limmat River. Rents are significantly cheaper than on the open market. Keystone / Michael Buholzer

A recent case in point, which made the headlines, was the renting out of housing in the new complex at the Hard tram depotExternal link. This is right on the River Limmat and is next to the trendy District 4. The 140 or so apartments attracted almost 15,000 applicants.  

Such figures are overrated, according to Schindler. “Many people just apply as a matter of course. We’re not talking about tens of thousands of people in need or anything like that.” Many of these applicants already have an apartment in Zurich and were just applying on the off chance, she says, adding that since the whole process took place online, no great effort was required to apply.  

The city’s experience also suggests that many people hadn’t even read the small print. There were upper limits on income and assets to qualify. A good percentage of those applying weren’t entitled to an apartment there to begin with.  

But many people never found out. In the world capital of housing shortages, only those who have been drawn at random are allowed to submit their applications. 

Edited by Balz Rigendinger. Adapted from German by Terence MacNamee/ts